Carlos Slim’s America Movil (AMX) will offload some assets from fixed-line operator Telmex and mobile player Telcel to lower its market share in response to changes in Mexico’s telecoms laws. The Mexican incumbent also plans to separate and monetise…
Carlos Slim’s America Movil (AMX) will offload some assets from fixed-line operator Telmex and mobile player Telcel to lower its market share in response to changes in Mexico’s telecoms laws.
The Mexican incumbent also plans to separate and monetise Telcel’s tower portfolio and related passive infrastructure. It did not say whether that would take the form of a spin-off or a straight sell-off.
The decision is based upon the recommendations of a strategic committee established in late June to assess its options following the regulatory reforms. The announcement comes after Mexico’s lower house voted in line with the senate and approved the finer details of the new regulations.
AMX has been branded a “preponderant economic agent” by telecoms watchdog the IFT and ordered to cut its share of the fixed and mobile markets below 50% or face asymmetric regulation. Telmex has around 80% of Mexico’s fixed-line market and Telcel boasts roughly 70% of the mobile sector.
AMX said it had “decided upon the sale of certain assets to a new and solid carrier independent from America Movil, with experience in the telecommunications sector, with sound economic and technical resources”.
It said the buyer had to be “a real option to participate in this capital intensive sector, to overcome the obstacle of the insufficient investment made by our Mexican competitors”.
AMX wants to sell the assets at their market value and it is not clear whether it will cut its market share by selling its operations in certain regions or if it will offload a slice of its nationwide business. It will also relinquish its option to acquire a 51% stake in DTH operator Dish Mexico.
In return for the disposals America Movil expects that it will no longer be defined as a “preponderant economic agent” and that it will no longer face asymmetric regulation. AMX also expects to be allowed to participate in convergent markets.
The company has long-wanted to enter Mexico’s pay-TV market but has been blocked from doing so by regulators. Its share price has risen more than 1.25% in after hours trading.
Mexico’s communications and transportation department said AMX’s latest move was a direct consequence of the reforms and would help create effective competition in the telecommunications sector.
